Findings are presented on a study of 40 gay father families created through surrogacy and a comparison group of 55 lesbian mother families created through donor insemination with a child aged 3–9 years. Standardized interview, observational and questionnaire measures of stigmatization, quality of parent–child relationships, and children's adjustment were administered to parents, children, and teachers. Children in both family types showed high levels of adjustment with lower levels of children's internalizing problems reported by gay fathers. Irrespective of family type, children whose parents perceived greater stigmatization and children who experienced higher levels of negative parenting showed higher levels of parent‐reported externalizing problems. The findings contribute to theoretical understanding of the role of family structure and family processes in child adjustment.